tv Bloomberg Daybreak Asia Bloomberg January 24, 2018 6:00pm-8:00pm EST
>> we lifelong bloomberg's asian headquarters. welcome to "daybreak: asia". steve mnuchin champions a weak dollar. lowest in was at its three years. the asian market is set to open lower as well. -- from new york, i am betty liu. president ping says that the world will be surprised, and another bump in the road for self driving cars. the tesla on auto drive hit a
fire truck, sparking an inquiry. ♪ betty: quite a surprise here, aurth quarter gdp showing contraction here of 0.2% quarter on quarter. 1/10stimate was a gain of of 1%, a slight down in the prior year. expectations were that this was not going to be a great number, but contraction is a surprise here. it is the first fourth-quarter contraction for the first time since 2008, also year on year, just up 3%. gain somate was a 3.4% not good news here for south korea. yvonne: it was a banner year
when it comes to exports, i guess you could blame to the strengthening of the one that there is also a nationalhow they -- holiday in october. the bank of korea upgraded this growth to 3%, so there is still a lot of good with exports still blooming those slowly, and private consumption has improved a bit as well. and how we're looking at the currency -- taking a look at how dare faring so far. flat, the nikkei and changed. we expect a pullback from the nikkei, it was a pretty ugly day yesterday for equities. it has a lot to do with the dollar, yen dynamics. we are back to levels that we
last saw in september. let's head back to australia, thewe are seeing a flat -- aussie of course is seeing a tremendous dollar weakness here. yields in the aussie tenure is higher with treasuries overnight as well. in new zealand, we got the inflation numbers but also missed expectations for the fourth quarter. up about a fifth of 1%. a look at first world news with courtney collins. >> a panel of brazilian judges has voted to uphold corruption against ignacio silva. but kills his chances in october for the presidential election in which opinion polls had him winning the field by a large margin.
the stock exchange] the record high on the news and it was up by 3%. in dia has new capital in state-run banks to help without hurting a recovery in credit growth. most of the money will go to ibb i bank it more than double that of the or viral -- of the overall sector. is at a 25n growth year low in 2017. the world's second work the richest person is warning that president trump's campaign could influence its relationship around the world. bill gates said that in the balance of hard power versus soft power, washington now emphasizes hard power. dates purged the president to do more to hurt the poor. i think he showed, that is
the area i have chosen to take microsoft, that warren buffett has been so generous in providing. i understand that that money iuld be very well spent, and am in there saying that we need to keep up the good work. journal saystreet that lg will be raising prices in washing machines and dryers after the u.s. imposition on tariffs. ofy're predicting a high some models. the company is making adjustments because the penalties are more severe than recommended by the international trade commission. issident trump said he willing to talk under oath to special counsel robert mueller as part of the investigation as to whether the president colluded with russia in the election campaign. in a surprise briefing at the white house, he said that he is looking forward to it.
global news, 24 hours a day, powered by more than 2,700 journalists and analysts in more than 120 countries. i am courtney collins. this is bloomberg. speaking about president trump, i want to point out a chart that is interesting. for -- wem living have president trump leaving for how much the engine has grown since he took office. #btv, painted an interesting story here of thatmer sentiment continues to improve well above -- as you can see, the red line. his approval rating continues to fall. it is at its lowest level right now it he could claim the u.s. -- that he is responsible for the u.s.
economy, some might look at this chart and say that it is growing despite trust -- president trump. a lot of this growth we have seen was set up by the fed and the obama administration, that the voices we have been hearing and davos is saying that we see a conundrum with soft data, not hard data. it has brought optimism in consumer sentiment, and it does not match what we are seeing with the economy so far, so there is that dynamic here when it comes to develop markets across the board. betty: earlier today we heard mixed signals from wilbur ross and steve mnuchin, that affected investor sentiment today. let's get right to what happened in u.s. markets. the first timely that many economists are saying you sought to members of the president's cabinet talk to the
dollar down to a great effect. look at the market going into today. you had all of the benchmarks at records. su: they fought their way back after the comments you see. the dow broke positive. we saw a red on the snp. the weaker dollar is near a three-year low, and we will have more on that as the treasury weakerry endorsed the dollar. heard from a hedge manager that we are looking at the most punishing bear market for the bond market since the 80's. take a listen. >> assets themselves are more sensitive. will produce the largest bear market in bonds that we have seen since 1980, 1981. >> are we at it? >> we are in it.
su: let's look at the second bull market breakdown. that's a get the chart we put out for you, 30 years of a bull market. the question for a lot of bond traders is are the central bankers waiting to pull back the punch bowl? there seems to be a question mark, but this is something that is a major weston on wall street right now. you mentioned that this is fairly unique as we heard from the treasury secretary. trying to add to the weakness of a already weakening trend. they are trying to soften this message later in the day. the white house press secretary say that the dollar is stable, but what you heard, take a look.
you have the three-year chart for the dollar. you heard from wall street strategists that you have to treasury secretary putting a bull's-eye on the beleaguered u.s. dollar. the exact quote, let's look at it from the treasury secretary, is that a weaker dollar is "good for us." what you see here is the dollar down here after a bearish year. at a three-year low. very interesting to see what trump himself says when he arrives in levels -- davos. vonne: forms this year reaffirming plans to open up and attract foreign investments. president xi economic advisor told that world economic forum that some measures will exceed expectations of the international community. this comes after wilbur ross accuses china of being more
protectionist than the u.s.. us,mackenzie has more for let's start with the comments echoing what we heard a year ago. messaging is still important, he talks about the needs for globalization. he talked about the need for reforms and said they are going to be stepping up in the financial sector. we have seen moves to lower institutional investors from abroad, and he said there would be more forms of the sector, and he wasn't shy to talk about the problems of debt. he said the credit expansion has been moderating now, and the focus -- to the next three years will be to ensure they balance this ratio, which has started to come under control now. on the flipside, we heard from wilbur ross on a panel with some famed globalists, and he was physically rankled at the
reaction that they have been getting at the u.s. administration on the tariffs in china. out of 20 odd major products chinaernational trade, has higher tariffs than we are in all but two, and eu is higher than we are in all but for, before we talk about sticks and stones in free trade, we should first talk about is there really free trade, or is it a unicorn in the garden? >> secretary wilbur ross saying that rhetoric and production list -- protectionist behavior. careful withbeing what he says and if he mentions anything with china, are the expectations that there is going to be some comments from president trump, adding on to the fuel to the fire
protectionism in china and ratcheting up the u.s.-china tension? >> certainly there appears to be a concern among the chinese that there may be other tariffs imposed. are about potential tariffs on steel, aluminum, intellectual property, president trump has all these decisions stacking up on his desk. panels and washing machines, it concerns china on what more and what further actions could be taken, and obviously there waiting for signals from the speech of president trump area the chinese are going to be looking at reactions or what actions they will be taking -- they have drawn up a list and we saw last year of areas, sectors, businesses they have made. on that route of tit-for-tat retaliation. many economists and investors are looking at what looks like retaliation in terms of
relations around the trade between u.s. and china. is also brings in other players, like south korea where said they are displeased by this position on tariffs. the chinese will be watching closely. >> tom, techie so much. still ahead, we're going to hear more on the devils forum. we see that easing program for concluding a few more years, our interview in half an hour. outlookut up next, and area this is bloomberg. ♪
mnuchin's comments that a weaker dollar can be good for the u.s. economy. -- his fundst suspendable? let's bring in tony boyajdian. joining us from sydney, tony, you think there is going to be -- for the dollar, it is not going to go much lower than this? >> yes, good morning. the u.s. dollar weakness we have isn at the moment unsustainable, because there are a number of factors that are pointing to the robust growth of the economy. the imf has ratcheted up the forecast for 2018 for world economic growth, and u.s. growth is expected to rise from the two point 7%em to for 2018, so if the federal --erve delivers the 3 anticipated for 2018, march, june, and september it will push the fed funds rate to that
target, and we will see some of that loss in the dollar index. iat was to eventuate, so think the current u.s. dollar weakness is really a function of the tax law coming through. that is what we are experiencing at the moment. i think it will be reversed at the end of the year. it seems a long time though if you look at the market. they seem to be pricing at a more optimistic u.s. outlook, they seem to be pricing in a three-year height, and yields are going up, stocks are going up. can you explain for the dollar, is there a time length? is it a matter of time before currency traders price that in? >> i think so. it is early in the year, and
people are just returning from their vacation. that we have seen, as i said, it is buy the rumor of facts scenario, and that is what is playing out at the moment. we have u.s. economy, seen a u.s. government shutdown just averted at the 11th hour recently, albeit for three weeks. the real risk for the u.s. markets going forward is going to be this debt ceiling. it is currently at an astronomical number back over $20 trillion, the u.s. government cannot borrow money, and that will really create a crisis when it comes to policy setting, because it remains that the world will have little fight in the u.s. dollar. what we are seeing is a little bit of caution until they see the ramifications of the tax law coming in. the repatriation of funds returning to the u.s., that should be quite inflationary, and it should see the u.s. dollar swing back. make of these
direct comments from steve mnuchin saying that the u.s. believes, or at least he believes as treasury secretary that a weaker dollar is better for the u.s. question mark? >> is talking about the government's book, and it is true. a weaker dollar does help on the manufacturing side of business. i think this is a short-term phenomenon. the currency will be and swings and roundabouts, and if we get the inflationary expectation and higher interest rates in 2018, and that scenario will change, but in the meantime, all the attention is on the rhetoric in davos. i think the short-term weakness in the u.s. dollar as well telegraphed. yvonne: there seems to be a consensus that that the top down the euro strength somehow. take a look at what we see in
the hard data, you see euro growth that came out last night at a 12 year high. is there a risk that it could lead to a lower dollar? u.s. -- with the u.s. dollar being weak, dated euro-dollar went on a ride, and you are right, the robust economy, the and employment rate is falling, the real concern is with inflation, it remained subdued. with the inflation rates -- the have alwaysand they done this, he wants to see a lower euro. a lower euro will push up inflation, and that is what he wants to see. it is difficult to talk the talk when the market is as robust as it is, but over the course of the next quarter, we see the u.s. dollar strengthened, then we will see the euro face back a little bit. i think where looking at the
1.15 range this year. betty: before you go, we want to take a look at this chart here. diversion between yields as well as the dollar-yen. thought that you think weakness is unsustainable, do you think we will see a catch up in the dollar-yen right now, or does it make sense to you? >> the strength that we have seen is on the back of some promising economic indicators. itk at growth in japan, and is at 1%. doesn't sound like much, but that is a good rate for japan. the boj yield control has been working quite well, so no surprises that the boj is on hold on monetary policy. the situation may change when the minutes come out later today, it might look for rhetoric to see if there's any surprises, but we don't anticipate any. with the inflation rate in japan being as low as .5%, there's
still a lot of work to do. the target for inflation is still 2%, so i think that will be the case now. short-term, we have already broken through that level 108 .9ht, so now that level becomes pivotal in terms of support. on the top side, resistance levels we are looking at -- my outlook for the end of 2018 is for the dollar-yen to approach that 1.17 level. to get on the back at the u.s. dollar strength that was inflationary expectations. tony, thank is so much. the topic of the hour, the strength of the dollar. let's return back to the breaking news we had just a short while ago. president trump has told in the special appearance that he would talk to
special counsel robert mueller under oath. let's look at this -- let's talk this with cornell law school is trump, hethis make these comments, it wasn't iscamera, but he said he willing to talk under oath to robert mueller. is that talk is absolutely going to? >> no, it doesn't. he could say one thing, and then do another. i think there is two ways of looking at this. either this is very donald trump to say, or incredibly smart, and i will let each of you decide on your own of what it is. betty: what do you think it is? >> i think it could be very smart, but i'm unwilling to attribute that type of strategic behavior to trump. it would be done in the sense that he is speaking not in line
with what his lawyers want to do. his lawyers want to ensure to keep the conversations with mueller's investigators off the record, and data wanted to be under oath, because it could be a futureic for possible criminal charge for lying under oath. it could be strategic in the he can say, i am willing to speak under oath, and then later, he can refuse to do so, are doing his lawyers prevented him from doing it. that way he can have it both ways. have his cake and eat it too, that he is willing to be transparent and nothing to hide, but these bureaucrat lawyers prevented me from doing it. that kind of strategic behavior, i am not sing it from trump though. betty: does that mean there is a negotiated agreement between
trump's lawyers and robert miller's team? >> i don't think this means there is a negotiated solution. he didn't say that there was a plan to speak with mueller's investigators on the record and under oath. he didn't say it is going to happen tomorrow or next week, he said he is willing to do it. i think the negotiations are ongoing, but there hasn't been a deal reached, and this could drag on for weeks or possibly them to reachor an agreement on the exact terms of the conversation. tell you thisis investigation is heading towards obstruction of justice by president trump? is definitely heading towards obstruction of justice. is that the entirety of the investigation? no.
i sense that mueller has the investigation sort of segmented into different little sub investigations, a financial investigation, but one of the major pieces of his investigation is the obstruction peace, and i think that one is definitely heard a link towards its conclusion. he wants to interview trump towards the end of that phase, but there could be other pieces of the investigation that could go on for many months after. think you so much on that -- thank you so much on that breaking news. trump said he would talk under oath to robert mueller. don't forget our tv function. into ourou could dive bloomberg functions that we talk about. for bloomberg subscribers only,
>> it is some 30 a.m. thursday in hong kong. the skies are blue, but it is foggy out there. the first major market open today. is 6:30 p.m. here in new york. i am betty liu in new york. yvonne: and i am yvonne man, and you are watching daybreak asia. president trump's economic team has landed and davos, taking their america first agenda to the world form.
steven mnuchin broke tradition by saying publicly that a weaker dollar is good for trade. sending traits back to the loads since three years. a trade war is already underway. china says it will surprise the world with new reforms this year, reaffirming its plan to open up and attract foreign investors. toldef economic adviser delegates that some of beijing's measures will exceed expectations of the international community, although he didn't give specifics. over a trade war with the united states. some measures will exceed the expectations of the international community. it is not only important for china, but the world. over theg will resume
ho chi minh stock exchange later thursday after a two-day technical glitch caused an outage. markets have had several trading halts, indonesia suffered to distractions back in july, while india's biggest exchange severed a three hour halt. singapore exchange was shut down last july i technical malfunctions. talk about hard work, china has in justrailway station nine hours. 1500 workers were working on a linking the river delta with the pearl river area construction began at six 30 in the evening completed atas 3:30. global news, 24 hours a day, powered by more than 2,700 journalists and analysts in more than 120 countries. bloomberg. we're counting down to
the market open in tokyo. futures is a little bit lower, plenty of worry with korean investors -- we have earnings to talk about as well. -- the as youmiss pointed out, we have earnings to consider. motor to report today, but let's talk about -- which managed to record a record fourth quarter. head of the results, concerns over slowing chip demand as well on the chart,see the share price had a record high back in october. thereat is not desert -- is a chip shortage.
also have korean steelmaker seemingly unstoppable as well. reported at over 60% surge in annual profits, making 2017 their best year. -- players, payers it helped equity market. as asianee that even stocks look stressed on momentum indicators, we have steadily rising earning estimates supporting the rally. you can see in the columns in february has been a positive month for asian stocks since 2008, so keep that in mind. you so much. now central banks are back in focus, with meetings in europe and malaysia. there's also economic numbers with south korea growing at its slowest pace.
we saw the contraction at the top of the hour. join us now, kathleen, let's start with south korea. what happened here? actually, it wasn't going to be such a poor number, granted there was going to be a deceleration. from three .8%, but a lot of the commentary at the end of 2017 going into 2018, semiconductor sales overseas really helping to boost exports, whose gdp, and people said he probably can continue at that red-hot pace. the surprise is on the corner, -- the number coming at 3% let's look at a bloomberg chart koreahat will show the gdp, korea exports, the green bars are the gdp number. you can see how it has decelerated after a steady climb higher, and export growth has
also slowed down. its key raise last year, and expert said we might not see more in 2018. numbers like this on top of the fact that we now have depreciating dollar. this whole specter of trade war, what does that mean for exporters? this is a surprise, and it is a broader context of where the world is going. >> let's focus in on the ecb. we'll be watching that meeting tomorrow, what happened there? well, from the ecb, we are waiting to see what the decision is. this --ooking for a hot
hawkish message. if remember back in october, they reduced the price of bond of 2018, to september because the recovery has been picking up steam. a lot of people are saying that maybe they are going to signal guidance, on forward guidance shifting. inflationo reasons, is still weak. you might get a more hawkish mario and johnny -- and in on top of it, you have a stronger euro, which is going to be exasperated by the weaker dollar. -- and the neter present obviously today, if -- that, he sounded expectation. carefullyis words earlier this week.
hike are also expecting a -- bank or garre on,o much has been going the region and inflation has been growing is because transport prices. let's take a quick look and talk about their situation. the rising oil prices is something we can't do too much about. that is a factor. it is a plus of the inflationary outlook, but any exporting nation has to wonder just how far this can go. rising local currency against the dollar. the expectation has been that the bank wants to dampen expectations, but there is a debate because there is a general election in august that is divided, do we wait for the
election or not. we shall see. risk in thety of southern part of asia this year. kathleen, thank you. not to general electric. -- to general election general electric. gere is a charge revealed -- earnings missed which contributed to a $10 billion loss. the stock closed down at more than two in the half percent. with more on this, and the bloomberg charts, we need to know, remy. ramy: that me walk you through two charts, the negatives, and some silver linings. one, the blue line here is the share price on a normalized basis.
area is during the tenure -- you can see it rose by about 40% up to the start of 20, and then it was down. , just when wee started in the early part of october until now, the share prices lost a third of its value. a lot of investors wondering what is going to happen with turnaround and asset disposition , and also if there could be a breakup in ge, as reported and rumored. let's go to another negative chart, analyst recommended. -- 12ite line is they month price target. you could see the current share price is even lower than that. for the white line, this is the the past eight years. before earnings happen, you saw a flurry of activity when analysts were lowering their recommendations.
the silver lining is that the current price is lower than the price targeted, so possibly there might be some positivity, will have to wait and see. that's get into positivity, does the financial function for ge. take a look at the orange bar chart. this is the revenue for health care. $5.1 billion in the fourth quarter of last year. it is up by 6%, so that is good news there. income inperating blue, operating income, aviation, 1.75%, it rose by 2% to 1.79%. to wrap it all up, some more positivity, sort of. this is the forecast for ge's earnings per share. has reaffirmed off of that positive -- the per-share dollar, you can see has been
falling ever since 2016. but look at this, this is the bloomberg average survey for eps looking ahead. that is actually more bullish than what ge has been saying. bloombergyour for charts as we try to pick apart what has been happening with general electric. special that sec probe happening. right, certainly, a lot is happening, and not a lot of it great as you illustrated. what did maker whirlpool has earnings asrted well. i want to take a look at this with retail and consumer reporter. what are the numbers of whirlpool? the forecast numbers were very disappointing in terms of earnings per share. much lower than the median
forecast. but -- a bitut a of the bump they got with the announcement of the tariffs. betty: why were the number so disappointing here? >> it is challenging. after business is in north america, but there has been challenges in developing markets, which is a significant part of their business. betty: an obvious significant part, but in terms of tariffs, you mentioned they offset these are expecting to see the benefit for a longer term in some respects? reale benefits should be a factor for them going forward for quite some time. even if the tariff is challenged at wto, it is going to take time to play out, so we can expect whirlpool is going to see the and at of the tariffs,
more level playing fields, which can help them capture more market share in their home market. bigy: of course, the question is a retaliation from lg and samsung. lauren, thank you for joining us. coming up next, years of easing. taske: the boj has a tough to reach its inflation target. this is bloomberg. ♪
>> in the next year, it is pretty good. i don't see the pol reversing. put all texas side, there's nothing like the leverage in the system that we had in 2006, 2000 seven. remember, we had a lot of prime household leverages, that is not true. >> we have to keep in mind the perspective of why some of the bad loans -- these are projects
that the economy was growing at 10 or 11%, and will continue to grow at a percent, and then came the slowdown in growth and the falling commodity prices and delays in project implementation. the economy goes through -- what is important is that not to only focus on recognition of bad loans, it is important is to focus on revolution and recovery, and that is what the banking system is focusing on. >> that is some of the banking voices we have been hearing from this year's davos forum. withoj will continue easing policy for a couple more years. 2% inflation target -- spoke with the ceo. japan, the bank of has been at this for two
years, and i believe that this policy will last for a couple of years. simplesaid that, just a lending businesses -- the situation will last. we need to have a diversification of revenue resources, something like lower interest income. namely, advising, and serving ,utual bonds, and trust businesses, and so on. in order to change revenue sources on some neglect us, we need some revolution of the culture. that is important to survive. >> you talked about the boj, any chance of a tapering by any chance? >> i am cautious to have that, because as you know, we are going to have the presidential
year, at the end of september. and also, other administration has to increase the conception of october of next year, so we would like to keep stimulation of the japanese economy. help -- policy. , the bank of japan and the government is now appropriately communicating. this will lastt, a couple of years. >> what assumptions are you making on inflation? governor kuroda has said it is on its way to 2% area at you might to his story?
>> the 2% is a difficult target to achieve. it depends on the price of the oil and other factors. but i think as you know, the japanese economy has suffered mindthe differentiation over decades. i think the bank of japan is right to give the message that we will fight the hedge fund of deflation mind. why mr.t be the reason kuroda would like to raise the cpa target now -- cpi target, but the timing to get into tapering for the bank of japan will be the japanese economic situation, and also it depends on the ecb's action.
ceo sato that was speaking in davos. you can get that story and many more to get your day going. can useg subscribers the tv feature on their terminals, and available on mobile in the app. coming up, who was behind the wheel. a second investigation over teslas autopilot accident. this is bloomberg. ♪
of stealing qs software. trade relations between washington and beijing, the group was found guilty of orchestrating a set of a criminal trade secrets trial. fighting espionage. yvonne: the need to trim costs, as it fails the sinking stocks. of 20 17,quarter beating analyst forecast, investors had already shown disappointment when several preliminary numbers last week. sales rose to $3.4 billion on strong casino result in singapore. bullinger founder is planning to invest -- billionaire is trying to invest more. the goblet market is recovering after a three-year slump, although betting remains at an
all-time high. second federal agency has opened an investigation over an incident of which a tesla car ran into a fire truck. it raises concerns over self driving vehicles. joining us from d.c., ryan, thank you for joining us. it seems like a blow to tesla once again. what happened here? on monday, the tesla model s plowed into the rear of a fire truck that was parked in the emergency lane and the carpool lane as the fire truck was responding to another incident on the road. and the driver got out of the car, firefighters on the driver said the car was on autopilot. trafficen, the highway safety administration and the national safety board has opened
probes in the crash to find out exactly what happened. betty: how unusual is it that we see the ntsb open investigations in cases that the don't involve a fatality? >> it is unusual, but it has happened before. i can 2016, after another tesla model s went underneath a truck, killing the driver, both the ntsb and tesla, i'm sorry, the the other group opened an investigation in the incident. those wrapped up last year, and it shows you that even though this is a similar crash, even though there was no loss of life here in this incident, it shows how interested federal regulators and safety officials are in this new automated technology is performing in the real world and how customers are using them. this: there is there was
-- nervousness about them. what has tesla said? >> tesla has declined to comment, the only statement that provided us is one that reiterates that the autopilot is only intended with use with a fully attentive driver who has to have their hands on the wheel, eyes on the road. of theggest to some andlenge in messaging explaining how this technology on help a driver be safer the road and perform some of the , but customers cannot take their attention off the road, so they can trust it yet. there is a difference between autopilot and the eponymous, but for the general public he be hard to figure out between the two. they do so much on tesla. coming up on daybreak asia, or
>> we are live from bloomberg's asian headquarters. welcome to "daybreak asia." top stories, mixed messages from davos. a trade war is already underway. that sends the dollar to the lowest in three years. stocks lifted by strong earnings, asian markets are set to open lower as well. bloomberg's global headquarters i am betty liu in new york. south korea slowed in the last quarter as weaker card imports are set to arrive. cheap deliveries are the worst result in nine years.
china tells dollar. more reforms on the way. ping's topsing economic adviser said the world will be surprised. ♪ >> no surprise is that we are talking about again. stephen mnuchin is adding fool -- fuel to this downtrend in the currency. let's look at things have been faring for the dollar since the president was elected in november of 2016. this is the function on your bloomberg. that is the dollar weakening against most of g10 currencies, with the exception of the japanese yen and the new zealand dollar. you could see how it fares with asia. it looks better for the greenback, but it is still the broader, weaker trend. a shift in trade policy for the dollar, or was steve mnuchin stating the facts?
the euro with the ecb meeting later on today. betty: was he just stating the obvious? the past that treasury secretaries have reiterated the strong dollar policy, but there were always whispers behind the scene that --ly might see it in public privately, they appreciate that the dollar is lower because it does help exports and the economy. perhaps he is just doing truth telling. yvonne: take a look at the picture. this is mixed when it comes to asia. let's get to the markets open with sophie kamaruddin. youre: the yen is trading a four-month high edging towards the one point 09 handle. stocks in tokyo open 9/10 of a percent lower. latest japanese finance ministry data in the past week shows that four outflows have accelerated.
contraction in fourth-quarter gdp, we are seeing a softer open for the kospi, as well as the won. it is trading at the weaker greenback adds to policy headings in south korea. it's take a look at the dow. leading theelco drag on the benchmark while utilities and health care are leading when it comes to industry groups. we are keeping an eye on auto stocks. softer data shows that car shipments offsets for semiconductor exports. let's check on the chipmaker following its fourth-quarter report. we did see its results top estimates despite what we saw in the last quarter. cosco on the rater after delivering a strong result. we do have key a motors due to report earnings this thursday.
checking in with other stocks ahead of their results do. lg electronics insight. givenompany is in focus tariff attention regarding the tariffs unwashed -- washing machines and solar panels. let's check in on the neighbor after it reported a miss in the fourth quarter and announced a buyback for 119 billion won worth of shares. last look at the gmm to see some broad checks on the markets. asx 200 down a third of a percent. as he pointed out, the currency space is looking mixed. aussie on the back. we do have the bloomberg dollar index gaining some ground trading at 11.21. asian ringgit in focus, with malaysia's policy decision due out today. betty: let's get to the first word news with courtney collins. first up, president talk says he is willing to
under old to special counsel robert mueller as part of the investigation into alleged collusion with russia in the election campaign. he said "i am looking forward to it." at whether the president abstracted justice when he removed national security adviser michael flynn, and fired fbi director james comey. the world's second richest person is warning that president trump's america first campaign could damage u.s. influence around the world. bill gates told bloomberg and dolls that other countries are raising their presence as the u.s. pulls back. he says that hard power versus soft power, washington in for sizes hard power. he urged the president to do more to help the poor. bill: i think he should. that is the area where i have chosen to take -- it was created through microsoft and that warren buffett has been sewed been so generous in
providing. that money can be very well spent. i am in there saying, come on, let's keep up the good work. courtney: president trump's economic team has landed in doubles, taking their america first agenda to the world economic forum. stephen mnuchin roque with tradition by saying publicly that a weaker dollar is good for trade, sending the greenback to its lowest in three years. commerce secretary unnerved investors by saying a trade war is already underway. judges haverazilian voted to uphold the corruption conviction of the former and increases prison sentence to more than 12 years. it kills his chances in october's presidential election and which of opinion polls had him leading by a wide margin. the sao paulo market exchange close at a record high and the
riau was up3% -- 3%. global news 20 for hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. china says it will surprise the world with new reforms this year. president xi's economic adviser told delegates that some measures will exceed the expectations of the international community. it comes as congress secretary accuses china of being more protectionist than the u.s. let's bring in our asia editor and tom mackenzie. joining us for this discussion, let's start with you. let us know about the key messages. tom: he is an increasingly giving us a bit of a tease. he did not give us concrete details about what these reforms might be but said there would be
a stepped-up approach to opening up the markets, particularly around the financial sectors. he talked about the tech problem and said it was in focus for policymakers. he said that being the fragile reduction and expansion in credit, which we saw towards the end of 2017. they will try to control the debt gdp ratio. said we will continue to open up and step up the place around the financial sector. we have seen those barriers lowered. there is excitement in beijing when you talk to banks operating there about opportunities. yvonne: why was he passed with delivering the speech. was he was quite -- it unusual that he was there last year. the first time a chinese president has taken to the stage. surprise that he was there. he is expected to take on the role as vice premier, probably as soon as march. he was elevated to the bureau,
this 25 member group of the most powerful people in china. he is a vice chairman of the national development reform commission. he is really the architect of economic xi's policies. particularly around debts. tois the one who is widely believe to have penned this front page opinion piece in the people's daily back in 2016, highlighting the risks around the debt in china. he is an increasingly important figure. he has shied away from the spotlight. this is the first time we have seen him on a big stage. expect more going forward. i wanted top talk more about president trump in his debut at davos. he will be leaving soon to go there with all the policymakers and elites. do you think you will for tray himself as the anti-xi. expressed talking
about globalization and he will perhaps take gloom off about rose that xi put out there last year. >> we will have to see. president trump has a history of doing one thing, or saying one thing and then walking it back. he may feel pressure to seem sphere the global trade than his actions would seem. talks about america first, then turns around and says we are for free trade, we just wanted to be fair to the u.s. that is how i think you will approaches speech there. we have already heard from wilbur what ross -- wilbur ross who says the president has a and has ace personality that sometimes people don't like, therefore
they criticize him. wilbur ross said the u.s. is more free trade friendly than china. i think we were -- i do not think we will hear a speech that is against free trade, i think that will be some pressure to do that. putting the sanctions that were announced this week into that context. it will be interesting to see. it would be very much in keeping with president trump's past oftory at these kinds international gatherings to say. we certainly heard him say one thing and i'll a bad. in terms of dialing it back, does it see mike all that goodwill that was generated i ameen president x president trump has been rolled back? this week willns certainly comforted that relationship.
it could be the start of increasing trade tensions between the two. advantageves china an in terms of trying to do free trade deals with other countries. this is something china has been stepping up. it really will put the u.s. at a disadvantage if it wants to go ahead and do individual trade deals. obviously, the president, upon taking office last year, pulled out of the transpacific partnership. the u.s. wants to go ahead on deals that are favorable to the u.s. yvonne: we saw him coming to a rescue and defending that america first policy. state agency of china reporting that the pboc will not nationalted in the cpp committee. since you are here, talk us through the significance of this. we are expecting that he will
step down as governor. seems like the first step towards that happening. what the speculation has been is who will take over from him. he is one of the longest-serving central banker governors of the major economies. player when itig comes to this deleveraging campaign. he has been increasingly vocal on the need to de-risk the chinese economy. increasingly vocal to wind back credit. there has been a lot a focus on who takes over from him. whoever does, whether or not they will continue with the policies, he is seen as something in the context of a reformer. it is certainly taking a stronger line on the debt interest on the top of the power making structure in china. had is significant and we have expectations that we will possibly give an announcement over who will be taking over from the pboc government only
have the national people's congress gathering in beijing. we will have to keep watching to see if we get any hints as to who will take over. first off, how important, or how interval and critical was he to chinese monetary policy, but also, is there a sense that the next prison will possibly take that policy in a different direction? have beeneveryone we speaking to in beijing, the view is that whoever takes over will likely continue in the same direction, which is the pboc currently pursuing a neutral policy. they have been tightening around the edges in the interbank. they will not be raising benchmark rates this year. there have been some who have been starting to change their view on that. the expectation will be in longer terms that will they will continue on his reforms around
the currency. he has been an advocate on moving towards a more market-driven exchange rate. china has the forward then step back on stabilization's. he was at the helm of the pboc in 2016 moment had the surprise depreciation. he is overseeing bumps along the way in china's reform and opening up. he is a proponent in that. as i said, he has been pushing onongly for a concentration this issue and risking in the shadow banking area. premier is thee cppcc.cc --cppc he has been tipped ahead of the entity. i don't think this is a huge surprise.
i need to look into it in a bit more details. figure tradeknown he has played a role in the relationship between the u.s. and china. he is seen by many in the u.s. to andone they could go they have a decent relationship with. he is seen as being more and the context of chinese communist party politics. he is certainly an important person at the top of the power structure in china and important when it comes to u.s./china relations. yvonne: a lot of important parts. thank you tom mackenzie and joe to -- jodie snyder. innovation challenges. the ceo looks to expand the core pharmaceutical business. our interview from dabbles in half an hour. betty: investors weigh out president trump's agenda as they welcome a weaker dollar.
betty: this is "daybreak asia." the dollar fell to a fresh three-year low at the back of the major currencies. treasury secretary steven mnuchin said he welcomed weakness. there are also weighing president trump's protectionist agenda as he has to -- as he heads to dabbles. chief asian economist joining us now. lines coming through from steve mnuchin that he is breaking away from a strong dollar policy. the make it as a shift in policy or he is just talking facts and numbers? >> there are a lot of stories going around. one of the key elements is that the market is priced in a a lot of the fed's rate hikes over the
course of the next two years. you have seen the dollar falling off because all the other central banks in the g7 and parts of the asian pacific are thinking about tightening. the american administration seems to have lacked on to -- latched onto that. yvonne: i wonder if there is any thinking. we have are a petri nation -- repatriatioation -- n. do think that weighed into what he said? mark: it seemed to be off-the-cuff. it seems to be the dollar weakened so it is good, rather than the other way around. if you listen to trump, he is an advocate of a weaker dollar for exports. it may come from him. about theearlier clinton administration, it was a very strong dollar for free trade in those days. to some extent you are getting
the opposite at the moment. betty: talking deidre but the moments of the dollar and the decline, do you think it is a or a proxy for investors on how they view that therek policies is not that synchronized global tightening that is priced into the equity and bond markets? actually playing a lot of the rule in this move. fed funds market pricing in three rate hikes for the fed towards the end of last year. simultaneously you saw the euro swiss market. the euro bond market and other central banks polls pricing in the beginning of rate hikes towards the second half of 2018. that is a point you saw the dollar selling off. speaking about central banks, we have the ecb meeting,
just seeing these movements and currency markets makes it more hasrtant to hear what mario to say. how much longer do you think the ecb will tolerate? i just want to bring up g #btv the continued appreciation mark in the euro. how much longer do you think the ecb will tolerate this rise in the european currency? has made it clear many times over the last seven or eight years that it does not like a rapidly appreciation -- appreciating currency. it will be fairly soon before you see the ecb complaint about the strength of the euro. we have seen a move up quite rapidly in the past six weeks. in thinking this through for the rest of 2018, the likelihood of or ecb announcing tapering interest rate hikes anytime soon is probably quite remote. do you think it is safer for mario to not say anything at
all about the currency? mark: i think that is right. yvonne: it is like they are starting a currency war. mark: the best attitude from central banks at the moment is to do nothing. if you think about the central banks in asia setting rates in the course of the next couple of days, the last thing you want for them to do is tightening. you have their ministers of say it at -- it undermines exports. thene: this speaks to protectionist american first policies we are expected to hear at dabbles. you continue to hear the rhetoric of america first, good for u.s. and the rest of the world. do you buy it? mark: no. if strong american economy is good for the world economy. areof the good things you seeing at the moment is strong numbers coming out of europe. if you look at the bank lending survey from the central bank,
they show the credit demand for investment that is picking up. it is very good for the world economy and trade. , chief economist joining us here in the -- in new york -- hong kong, i forgot where we were. tv , you can watch us live and catch up on past interviews. become part of the conversation. send us instant message during our show. this is for bloomberg subscribers only. check it out at tv . this is bloomberg. ♪
criminal trade secrets trial. it is raising new questions about china's commitment to fighting ip infringement and corporate espionage. think of china is denying laundering that led to charges in france. the bank ignored millions of dollars being transferred to china to avoid taxes in europe. bloomberg has seen previously unleashed documents that have not been reported. almost $50 million within the bank of china accounts between 2012 and 2014. we get around about the stories you need to know to get your day going in today's edition of "daybreak." to dayb be go -- go and checkout assets that you care about. president is using being unleashes sweeping changes to china's property sector. this is bloomberg. ♪
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8:30 in singapore, dark clouds. we are a half-hour hour away from opening for the trading day. betty: tgif. i am betty liu here in new york and you are watching "daybreak asia." let's get to the first word news with courtney collins. india intends to inject $14 billion of new capital and to state will run banks to help them meet norms. that is hurting recovery and credit growth. most of the money will go to the is 25%.se ratio more than double that of the overall sector. state bank will take the next largest handout. india's loan fell to a 25 year
low in 2017. china says it will surprise the world with new reforms this year, reaffirming its plans to open up and a track for an -- foreign investments. xi'sent is's -- president chief economic advisor said it will exceed expectations, but he did not give specifics. he spoke of a full-scale trade war with the united states. some measures will exceed the expectations of the international community. it is not only important for china, the for the whole world. inrtney: trading will resume the stock exchange later on thursday after a two-day technical glitch, the longest outage in a decade. asia-pacific markets have had halts. trading indonesia suffered to distractions in july while
india's biggest exchange suffered a three-hour holds. the longest ever that month. the exchange was shut down by a technical malfunction. fired its newest and biggest rocket ahead of an expected launch in the next couple of weeks. it briefly ward into life for the first time in a crucial prelaunch test at the kennedy space center. all three boosters, 20 seven engines and all were tested. space x chief elon musk said everything went well. it will carry a red tesla roadster belonging to musk. global news, 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. ♪ are shaping up. let's look with sophie kamaruddin. sophie: there is a big picture here.
you have a dollar trading at three-year lows following the protectionist top -- talks from green america at davos. we are seeing the yen come under pressure. still eyeing that 109 handle. the aussie fighting today. it is being sold against the kiwi for the inflation mix -- miss in new zealand. you have the ringgit around 390 ahead of the malaysian policy decisions do today. the latest inflation data passing the case for a rate hike in malaysia. the korean won is rising despite that asset price contraction we got an gdp. offsetting exports the rise in the semiconductor shipments. the dollar is also boosting oil prices. the 66s gunning for level after u.s. stockpiles fell. that is a record losing streak for u.s. cruise. it is notstocks --
helping the asx 200 which is down to 10th of a percent. it is snapping a today rise as most sectors are under presser. the asx 200 is down, a mike its regional pure. investors have an australia shaped blind spot. 2% for a techthan rally that we have seen in asia. that has left australia behind. when you consider the benchmark dollars, the asx 200 has offered a greater total return been the and 2017.d both 2016 let's pull up the board, western areas. rising the most since october 2. the company saying it is on track to meet guidance. rising in tokyo after upgrading to buy. in seoul, s k holdings is climbing. stakes inelling its
power plants, a deal that could shed $500 billion. korea's economy growing at its slowest pace in nine years as 2017 draws to a close. the bank of korea raising rates again in 2018. bloomberg global economics and policy head here. what to expect from the ecb and malaysia's bank meeting later today. a lot on the agenda. let's talk about those korean gdp numbers in the fourth quarter. kathleen: putting on the brakes in the last quarter of 2017. exports down 5.4% on the quarter as they drop in auto exports overcame a jump in semi conductor exports. look at g #btv 3943 with me. the quarter on quarter drop of -.2% with less than the .1%
forecast, and on a year-over-year basis, we have gdp in korea dumped 3%. it was forecasted at 3.4. it was running at 3.8%. the bank of korea cut its key rates towards the end of last year. people have been saying, will they follow up this year? we do not know. gdp asre looking for 3% a growth rate in 2018. perhaps this is not too much of a problem for them. watching theone is weak dollar pushing currencies up around the world. korea has been a part of this growth. you have to be wondering what that will mean for the pink of korea as this year plays on. bank of korea as this year plays on. in malaysiaconomy is expected to raise its key rate alone among these asian central banks, rate -- right? growth modify
percent gdp year-over-year, inflation rising. that is what is keeping these rate hike calls alive. transport prices are boosting, you also have oil prices rising. but look at kathleen: 48 -- g 4870 eight. you can see what it looks like when you look at the level of inflation as it rises as inflation rises. you can see the change in rates. is enough there for the bank to go ahead and do this. as well, the ringgit up more than i'm percent, so far this year versus u.s. dollar. that is one thing that will help offset inflation pressures. whether a debate over they raise that key rate because of the general election in august, or will they want to get of the way now, not only
to avoid political dynamics, but to dampen inflation expectations before they move higher. the big one will be ecb kathleen. are we expected to hear hawkish comments coming from mario draghi? kathleen: i think that is the last thing we will hear from mario draghi, particularly after this big move. by definition, every other currency is going higher. they already have made a big announcement about reducing the pace of bond buying in october last year, now extending through september 2018. there were comments in the ecb minutes -- when the ecb minutes came out in late december, as well as comments from more officials suggesting this idea that they might be ready to start guiding us on the foreign guidance. people have been saying it will be about week inflation and a fear of boosting the euro
further. when mario draghi talks, he expected to be dovish and maybe drop on the euro or prevented from moving higher. yvonne: we were talking a mark uvc. they expect the central bank to do nothing for 2018. joining us live from tokyo a there. china is taking action against runaway property prices. xi pushes a model. if flurry of activity is underway by banks, local governments and the mainland's biggest stock exchange. it's bring in bloomberg's finance editor who is joining us here in hong kong. the aim is to convert the homebuyers into renters, may be property tax in the next couple of years. china has been struggling for a long time to get this market under control. the hope is that with some of these measures will relieve
pressure for prices to rise. it is a fairly difficult task week as a whole population has become so accustomed to it being a one-way bid, you cannot lose. a part of an are attempt to change that and the dynamic of the market. betty: what is likely to happen to prices? paul: the analysts will tell you, they have different views about that. some will tell you that they are encouraging this retail housing and that will mean that people delay purchasing and that removes pressure for prices. other analysts it will say, if you get people getting cheap rental housing, it subsidizes when a young professional saves up their capital to then buy a house. of this are uncertain. it was eight years ago at davos
talking premier was about how we need a long-term method of stabilizing the housing market, and we will get to it. it is something i have always been talking about, that it seems now that there is a really big push. haseems that president xi staked his name on curbing speculation, changing the public's attitude. however they do it, since there is a lot of activity happening, we have to wait and see what the results are. paul, bloomberg's asia finance editor in hong kong. groups staying on china, it is now one of the world's most indebted companies. it is taking a rare step of inviting outside investors to buy into two hong kong land plots. seven have halted trading in their stocks waiting for
announcements. joining us now from tokyo with more on the story, bring us up-to-date on the latest efforts by hna. they are talking about bringing in investors on a million dollars? >> that is for the deal with a invested in some prime plots in hong kong last year. it was quite a bidding war. now they are trying to finance unusuallopment with in appeal to outside investors. under normal circumstances, they would not have a problem financing something like that through banks. you how badows their scramble for cash is. in the past 24 hours we have seen two other announcements. port, theh swiss baggage handling and majestic's company they bought. they are planning an ipo there israise rates and there
still more capital. they are also announcing reorganization through which one of the units will take over for others. they will try to sell that to investors, to an ipo. there are a lot of moves afoot to raise capital, breaking on a day by day basis, with this company. there were some reports in hong kong that china's media was told not to play out some of the debt issues coming out from some of these conglomerates. are they more in the trouble spots than other conglomerates that went on buying schmooze -- sprees? dave: they have emerged as the one that seems to be facing the steepest hill when it comes to paying debts. there has been a lot a focus on that, and that message from china's government to calm down the coverage by state media,
that is a very interesting announcement. normally that kind of guidance is delivered by the government without making any kind of formal announcement. pretty big surprise. at the same time, when your company is as big as hna, as diversified, and you are raising money, there are a lot of people involved. you have a lot of different banks and bankers involved. there are a lot of different people that will be talking about these. the idea that the chinese government will exceed in putting a lid on coverage of this breaking story day by day, that seems unlikely. it does seem that the tone of the coverage would change. certainly, the kind that you get in china when you have people the prospects for default and this kind of thing. some of the big conglomerates kind ofed down that talk and rumors and had to respond to a. maybe that is what this is more
directed up. the blind side reports i have come out sometimes against these companies. i think going ahead with day-to-day coverage will be continued because the company is in a position to be making a lot of decisions and a lot of deals on a day by day basis. ipos,new announcements of new pitches to investors to invest in land deals. all sorts of things are coming down with this company. yvonne: certainly something new every day. dave, our asia conglomerate editor joining us live from tokyo. more from tebow's that world economic forum. what the pharmaceutical ceo says is one of the biggest challenges when it comes to innovation in his industry. this is bloomberg. ♪
that will happen when the prices changes in the market. with thee details investors, we cannot discuss it at this stage. always dialogue. -- any issue is on the table with no affect to our sovereignty. any agreement applies to all. on the other hand, from an economic point of view, despite what has been unsaid in the beginning, the qatar academy wouldollapse -- economy collapse in the past few days, it did better than expected. emphasizemportant to that brexit is a problem for europe. europe -- europe will be weaker and be without one of the
largest economies in europe. betty: more voices. from pharmaceutical ceo who said the biggest challenge. >> it was crazy, it is great orders come in. then you realize i have 100 orders i have to ship out. weights ofata, the the item, everything is put into ship station. when you print the shipping label, everything is done. it is easy. bring on the orders. >> the number one choice of online sellers. get two months free. >> we have big diverse mints. at the moment we are focusing on
the business. debt, are trying to pay how is that coming along and where is that balancing act, so to speak? >> we want to remain investment-grade and we want to be able to continue to have a very strong finance oh -- financial position. especially partnership, in the last three years we had more than 100 rmb partnership. rnds more to improve our profited. >> how sustainable is that going forward? what will drive growth? product, it a new will drive growth.
we are improving our profitability, we are very much rndsing on our productivity. we have made a very significant rnd formation. haslinda: what are the biggest challenges for 2018? >> the biggest challenge is to really discover and develop medicine. to do that is hard because you are never alone. it is really a challenge. that is why we have made this transformation to focus on a few areas in order to really improve our productivity. haslinda: where are you in the journey to get there? >> we have decided to focus on neuroscience and oncology.
-- one of our priorities to do internal .esearch, but be a true partner we have more than monitor partnerships. i would say that we are the but weng of the journey, have the foundation to be successful in the future. haslinda: we are seeing a slump in generic drugs. do you see that persisting? i think there will always be a pricing pressure, which will happen in the generic market. even for innovative medicine. was takedat pharmaceutical ceo speaking to a haslinda. turn into "daybreak."
you just witnessed the world's first 100 drones indoor flight show without gps. >> to why not, in nfl quarterback. hype, there was an elephant in the room, the flaws in intel's chip design. it can meltdown. they allow hackers to still data on cpus.uters running intel makes 90% of the world's computer processors and 99% of the servers chips that power the internet. every pc,tively puts smartphone and server in the world at risk. they tried to sue. >> as of now, we have not received any information that these exploits have been used to ask -- to get customer data. -- not yet. it can slow chips beat up to 30%. it has not helped the stock performance. will the security threat threat in intel's sales?
amazon, apple and google are all working on their own chip. in the sixth month, intel was trying to work on the flock and they sold 20% in intel's shares. u.s.s not stopped lawmakers from demanding that the doj and fcc investigate. the last time they had a chip problem was in 1994. that cost intel $475 million. that kind of problem might not fly with investors. markets coverage continues, next. this is bloomberg. ♪
rishaad: a chilling message from davos. wilbur ross says a trade war is already underway. will happen in the second half, but no decisions on whether the international listing will be there. and, are we seeing the end of an era? losing its place on an influential committee. salamat from hong kong. haidi: and i'm haidi lun in sydney. coming up, continued payouts.